Japan Posted Record Trade Deficit in August

Japan posted its largest-ever trade deficit in August as soaring energy costs pushed up the nation's import bill and export growth cooled.

The shortfall was at 236 billion yen ($2.3 billion) from a year earlier on a balance-of-payments basis, the Ministry of Finance said in Tokyo today. It was the largest gap since the release of comparable figures in 1985.

Crude oil traded 61 percent higher in August from a year earlier, after reaching a record $147.27 a barrel on July 11. Exports are slowing as downturns in the U.S. and Europe worsen and China shows signs of faltering.

Imports climbed 20.2 percent from a year earlier, after rising to a record in July, today's report showed. Japan gets virtually all of its oil from abroad. Exports rose 0.9 percent.

The current-account surplus, the broadest measure of trade because it includes income from investments, shrank 52.5 percent to 988.8 billion yen.

Crude's 46 percent drop since July 11 is providing some relief to companies whose profits fell for four quarters as margins tightened. Wholesale inflation has probably peaked: the prices companies pay for energy and raw materials climbed 6.8 percent from a year earlier after gaining 7.2 percent in August, the Bank of Japan said yesterday.

Japan Posted Record Trade Deficit in August

TradingEconomics.com, Bloomberg.com
10/14/2008 8:50:20 PM